I-T officials to open 400 more lockers of Vardaan market safe deposit vault

Kolkata: After opening 200 lockers of a private safe deposit vault in Vardaan market in which the investigation unit of the Income Tax (I-T) department seized around Rs 3 crore worth of jewellery and cash, the department will soon be opening another 400 private lockers as part of an ongoing investigation.

During the course of search of a recent raid in the city, which was conducted on the residential premises of a company's group of directors, the I-T department had found three locker keys of the private vault, which led them eventually to seize the entire vault.

After the seizure of 6,00 lockers, which was being operated by Shree Vardaan Safe Deposit Vaults, many senior income tax counsels from the legal fraternity have expressed strong resentment about the move of the I-T department, terming it as "illegal" under Section 131 of the I-T Act.

According to them, without individual search warrants against the locker owners, the I-T officials cannot open the lockers and physically verify each one of them.

But in this particular case, this rule has been flouted by the department.

Interestingly, the vault owner, SK Damani, has issued an advertisement in a newspaper, asking the locker owners to contact him as a proper documentation about the locker owners has not been maintained by him.

Out of the seized lockers, while some do not have the full address of the owners in the book of records, some have been shown as 'not allotted' and others do not have keys. Further, the vault owner, himself, is unaware about the owners of some of the lockers.

The I-T department has informed the Reserve Bank of India about the existence of the private vault as the owner did not maintain a proper Know Your Consumer (KYC) process.

Also, some of the lockers were also found to be Benami as they were held by people in other names.

On questioning Ashish Verma, the Pr. DI (Inv.) of the department that whether the I-T department has the power to issue a search warrant against the entire vault and issue summons to the locker owners, asking them to open the lockers in front of them, identify the valuables from the book of records and also to seize them if they are not there in the books, he said: "Income tax has the power that if something is not recorded in the books of account, if it is not explained, you have to pay the tax on that. So to ensure the payment of tax, till they don't pay the tax, we seize it. When we seize the cash, generally, they say whatever cash you have seized, out of that you adjust and then we adjust and we return the balance cash. In the case of jewelry, they pay and we release them."

He said: "We are not seizing the cash and jewellery immediately as there might be ancestral jewellery. So in such case, we are giving them three to four days of time to show where they got it from. If they are not able to show the

document, only then we are seizing."

Suggesting an alternative method, Verma said: "If you want to escape the penalty and prosecution, you can also go to settlement commission and declare everything."

On asking about whether the vault owner should be penalised for non-maintanence of KYC rather than the locker owners, he said: "Without KYC, private lockers cannot be maintained according to the banking law. So, the vault owner should be penalised because he did not maintain proper documentation."

"Apart from finding locker keys, we got information that such locker is being operated where unaccounted things are being kept and proper documentation is not being done. But we cannot penalise the vault owner, it's the job of the RBI and they will take the required action," he added.

He also said that a show cause has been issued to the vault owner and he has been also called for questioning. If the owner is not able to produce all the locker owners in front of the I-T department within 15 days, he will be held responsible for everything.

When asked about the I-T raids which were conducted in the office and premises of businessmen from the iron and steel sector, Verma said: "The investigation is still on. The businessmen are being called for questioning."